WORLDWIDE SHIPPING INDUSTRY
India’s fertiliser movement now eligible for subsidy
A policy for reimbursement of freight subsidy for transportation of fertilisers through the coastal shipping route has been approved. Earlier, this financial support was available only for fertiliser movement via railways. The move by the Department of Fertilisers means reduction in freight by about 40 per cent. Experts believe the move will help in significant reduction in cost of transportation, time and is environment friendly. According to industry figures, about 24.2 million tonnes (mt) of urea and 25 mt of other fertilisers (phosphatic and potassium) were transported in the country in 2017-18. The shipping ministry is estimating movement of about 9-10 million tonnes of fertiliser through coastal and inland waterways a year by 2025, which could save around Rs 900-1,000 crore per annum in freight cost.
Asia 380-CST time spread hits near 7-month high
Asia’s 380-cst high-sulphur fuel oil (HSFO) front-month time spread hit a near seven-month high on Wednesday as tightening arbitrage flows into the Singapore trading and storage hub squeezed the near-term supply outlook, trade sources said. The July/August 380-cst time-spread widened its backwardated structure to $11 a tonne on Wednesday, up from $9.75 a tonne in the previous session and its highest since Nov. 29, Refinitiv Eikon data showed. In the physical market, 380-cst HSFO cash premiums also hit a more than six-month high on Wednesday after rising 16 cents per tonne from the previous session to $5.03 per tonne to Singapore quotes.
Banks feel the heat from Asian leasing in financing greek shipowners
Last year was one of contrasts for the ship finance sector as the once dominating German ship finance market continued to contract with few banks remaining committed to shipping, while the competition from Chinese leasing continued to rise when it came to financing the key Greek shipping market. In its 18th annual survey of the Greek ship finance market, Petrofin Bank Research, reports a slight decrease in bank lending to Greek shipping with the total portfolio at $53.18bn at the start of 2019, just over 1% down on12 months earlier reversing a heavy declining trend. The Far East and North American share of the Greek market continues to rise, though failing to fully counterbalance the decline of German and UK banks.
Asian shipowners maintain heightened security levels on Middle East transits
Asian tanker and LNG shipping companies remain cautious on Middle East transits after last week’s tanker attacks, and have stepped up safety measures including tighter security of seaborne vessels and full-speed navigation in the Gulf of Oman, the companies said Monday. Last week’s attacks on one oil product and one chemical tanker had resulted in several owners of clean and dirty vessels holding back spot charters for Middle Eastern cargoes on Friday, which triggered war risk premiums for vessels willing to undertake the voyage, and pushed up freight rates for immediate fixtures.
S Korea expects solid results in shipbuilding sectors
South Korean shipbuilders and carmakers are set to report improved earnings this year on rising demand for high-end ships and SUVs, a major business lobby said Monday. Shipbuilders will benefit from rising demand for liquefied natural gas carriers and environment-friendly ships due to the International Maritime Organization’s stricter emissions regulations.
Carmakers are also expected to report an improved profitability on a weak won and robust sales of SUV models, according to the Federation of Korean Industries (FKI). But steelmakers and semiconductors won’t likely report any meaningful rebound in business results due to rising costs and a slump in demand, it added.
The business lobby said steelmakers are likely to suffer higher raw material prices following the collapse of Brazilian mining giant Vale SA’s mine waste dam in January. They seem to be unable to pass most of the price hikes onto customers, the FKI said, adding high inventories remain woes for chipmakers.
Asian refiners may trim sour crude intake on Dubai backwardation
Asian refiners are increasingly finding reasons to cut their exposure to Middle Eastern crude in the second half of 2019 amid prolonged backwardation in the Dubai benchmark price structure and the latest tanker fire incident in the Gulf of Oman.
S&P Global Platts Market on Close assessment process witnessed Asian traders showing interest in unwinding some of their long positions in the Middle Eastern sour crude market with the wide backwardation in the Dubai market prompting refiners and trading firms to put brakes on their growing storage positions. The spread between the first and third-line Dubai crude swaps was assessed at $2.06/b on May 17 in Singapore, Platts data showed, the strongest backwardation since $2.13/b seen on October 31, 2013. The Dubai swaps spread averaged $1.49/b to date in the second quarter, the highest quarterly average spread since $1.50/b seen in the third quarter of 2013. The physical Dubai crude market structure also strengthened to a multi-year high recently, with the spread between front-month Platts cash Dubai and same-month Dubai swap averaging $2.37/b in May, the highest monthly spread since November 2013, when it averaged $2.43/b.
Baltnav reports profitable year
Copenhagen-based bulk carrier operator Baltnav reports that it secured a profitable 2018, which has allowed it to expand globally with plans to open a new office in Brazil as well as new forays into ship management. The company’s net profit jumped to US$ 4.2m in 2018, solid performance for a company dealing exclusively in smaller sized Ultra-Supra-Handy bulk vessels. Baltnav, which operates a fleet of 47 vessels from Ultramax to Handysize types, employs a business model focused on extremely short charter contracts, typically only from one to three months of period trading.